Vietnam’s Economic Outlook

For almost a year now, all we seem to be hearing on the news is how bad the economy is. There are rising unemployment here and bankruptcies there. So how has the economic downturn in the US, Europe and other major economies affected Vietnam? In a new article by Dr. Long S. Le of University of Houston, he writes that Vietnam is more vulnerable than ever with its growing links to the world economy.

Since Vietnam’s key export markets, the US, the EU and Japan, are expected to experience negative GDP growth in 2009, we cannot expect much optimism for Vietnam’s export driven economy. Its GDP growth rate for the first quarter of 2009 was the lowest in over a decade at 3.1%. The Economic Intelligence Unit published a gloomy forecast of Vietnam’s 2009 GDP growth rate at 0.3% compared to 6.2% in 2008. The IMF and World Bank on the other hand released more positive figures for 2009 at 4.7% to 5%.

Meanwhile, the Vietnamese government has distributed $1 billion in stimulus and a second stimulus package is on the way. The impact of these packages, however, are still debatable.

For a more in-depth analysis on Vietnam’s economic conditions and outlook, read Dr. Le’s “Vietnam’s Growing Pains” at the Far Eastern Economic Review.